NYMEX near-month Henry Hub natural gas futures contracts fell by 6.7% in the week ended August 12, 2016, to close at $2.59 per MMBtu (million British thermal units).
Prices fell by 3.6% in the previous week, closing at $2.77 per MMBtu. US natural gas (UNG) fell during the week due to oversupply concerns.
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According to the weekly report by the EIA (U.S. Energy Information Administration), US natural gas stocks posted a net injection of 29 Bcf (billion cubic feet) for the week ended August 5 compared to the five-year average injection and last year’s net injection of 53 Bcf and 57 Bcf, respectively.
This resulted in a slight fall in the natural gas surplus compared to the five-year average. The fall in net injection was due to strong demand from power utilities. Higher natural gas demand from power utilities benefits MLPs such as Enable Midstream Partners (ENBL) and Boardwalk Pipeline Partners (BWP).
The above graph shows the weekly near-month natural gas futures prices at Henry Hub, the national benchmark for US natural gas prices.
There are two ways that natural gas prices impact energy MLPs:
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